- Employees argued that overtime pay formed part of their employment agreements and could not be removed through policy changes.
- The City argued that the employees had failed to prove a contractual right to overtime remuneration.
- The judge refused leave to appeal, finding no reasonable prospect that another court would reach a different conclusion.
City of Cape Town employees who challenged the municipality’s decision to stop paying them for overtime failed to prove that their employment contracts guaranteed payment for extra hours worked.
The Independent Municipal and Allied Trade Union (IMATU) brought the claim on behalf of 14 members who had previously received overtime payments. The dispute centred on whether their employment contracts and related documents gave them a contractual right to those payments, even when the City’s policies changed.
In a judgment handed down on 8 October 2026, Judge T Gandidze of the Labour Court in Cape Town refused the employees’ leave to appeal an earlier judgment that dismissed their contractual claim.
Employees relied on employment contracts and policies
The employees argued that their letters of appointment, employment contracts and other documents had to be read together to determine their entitlement to overtime pay.
Their employment documents referred to policies being “amended from time to time.” They argued that this wording did not give the City an unrestricted right to remove an existing entitlement to overtime remuneration.
According to the employees, overtime pay formed part of the agreement they had entered into when they started working for the municipality. They argued that the City could amend its policies without necessarily having the right to change their contractual terms and conditions of employment.
They also maintained that overtime was payment for work performed and could not simply be withdrawn without consultation or agreement.
The employees argued that the issue was not whether they had a right to overtime pay in the first place, but whether the City could take away that right.
City challenged the basis of the claim
The City argued that the employees had failed to identify a contractual provision that entitled them to overtime pay.
It also pointed out that their case had changed during the proceedings. The City said the employees had initially challenged changes to its policies but later argued that, although the policies could be amended, their alleged right to paid overtime could not be removed.
The municipality further argued that the employees’ interpretation of the phrase “as amended from time to time” would lead to an unreasonable result by effectively allowing different policies to apply to different groups of employees.
Judge found the employees had not proved their entitlement
Judge Gandidze found that the employees had brought a contractual claim and therefore had to establish an express, implied or tacit term in their employment contracts entitling them to overtime pay.
The judge found that they had failed to identify the contractual term on which their claim depended.
“The question the plaintiffs are not addressing is whether they had a contractual right to overtime pay,” Judge Gandidze said. “They had to prove that contractual right. They failed to do so.”
The judge rejected the employees’ attempt to frame the dispute primarily around whether the City could remove an existing entitlement. Before that question could be answered, they had to prove that the entitlement was part of their contracts.
The court therefore did not establish a general rule that the City could freely withdraw overtime pay from employees. Rather, the employees’ claim failed because they had not proved the contractual right on which it was based.
Judge Gandidze also found that the matter was not sufficiently important to warrant an appeal and that there was no reasonable prospect of another court reaching a different conclusion.
No costs order against union
Although the application for leave to appeal failed, Judge Gandidze declined to order IMATU to pay the City’s legal costs.
The judge acknowledged that the employees were aggrieved by the decision to stop overtime payments after receiving them for several years. The claim was not frivolous, but it failed because the contractual entitlement relied on by the employees had not been established.
The final order refused leave to appeal and made no order as to costs. The earlier dismissal of the employees’ contractual claim therefore remained in place.
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